Cost of car maintenance putting a dent in the budget

Cost of car maintenance putting a dent in the budget

Queenslanders pay the most per person to run and maintain their cars, around $4,108 per customer per year1

Toll-paying NSW motorists spend on average $336 per annum on tolls2

Residents in WA fork out the most on parking2

Aussies spent $152 million on parking their cars last financial year2

Motorists spend the most on maintaining their cars in May and June, but the least in January3

24 September 2013: Transactional data from CommBank Signals3, has revealed fascinating insights in consumer spending habits when it comes to motoring.

Australians’ love of driving comes at a price with the average Australian forking out $3,854 to run and maintain their car each year1 – without even considering the costs associated with loan repayments or car depreciation.

The transactional data highlights car associated costs vary considerably depending on your postcode. Parking spend in WA is the highest in the country, while NSW road toll paying drivers spend $336 per annum on tolls – about one quarter more than their nearest counterpart, VIC ($269)2.

According to recent research from the RACQ, location can also play a big part in registration costs. Queenslanders are paying three times more than motorists in the NT and contributing to more than $3.6 billion in registration tax revenue4.

Diana Mousina, CommBank Economist says vehicle repair costs are also influenced by geography: “Drivers in the NT and WA are paying considerably more on vehicle maintenance than those in the other states.”
Diana continues, “There are also significant spending pattern differences between motorists in metro and regional areas. Regional motorists visited service stations 40 times last year9, compared to 33 times for metro motorists and they spent almost $400 more than their city counterparts6. Whereas city slickers spent almost double ($315) on road tolls than regional drivers ($171) last year6”.

Average5 Spend per Customer 2012/20136

State snapshot of average5 spend per category6

Note: All Categories’ spend refers to the average total spend per person assuming a person was to spend on all the motoring categories listed above.

A consistent finding from the data highlights service station expenses as the number one cost for motorists across all states and territories. Australians spent a total of $7.2 billion in 2012/13 with their credit/debit card, equivalent to approximately $1,552 per person6.

“Fuel costs will always be a significant expense for car owners so I’d encourage consumers to think about putting more of their weekly budget aside to cover the increasing cost of fuel, especially those in regional Australia. On top of this, the fall in the Aussie dollar means that petrol prices are under upward pressure”, explains Diana.

With the ever increasing number of people using their cards, it’s easier to measure how much we are spending on parking. Australians total spend for this category surged to $152 million6 last financial year.

Residents in the ACT and WA showed the largest increase in parking spend, with an increase of 29 per cent and 19 per cent respectively over the last 4 years. Also 18-35 year olds have increased their parking outgoings by 17 per cent over the last four years8.

Diana discusses other key trends across Australia regarding motoring costs; “When deciding between a large or small car, buyers who opt out of large cars in favour of a small car can see their bank balance improve by on average $2,800 per year when including costs such as finance and depreciation10. By choosing wisely there is potential to make significant weekly savings. “Further insights reveal Tasmanian motorists pay the most ($561) for auto associations and breakdowns with expenditure 33 per cent higher than the next highest state, VIC ($422)6. On the other end of the spectrum, the lowest spending states are ACT ($215) and WA ($217)6,” Diana adds.

“Our reliance on cars cannot be downplayed, especially in a country like Australia with vast distances. There will always be costs associated with running our cars, but by making sensible choices about vehicle type and taking advantage of simple, preventative maintenance, consumers can save money. By being aware of these costs, people can budget appropriately and manage cash flow across the year,” concludes Diana.

For more information and an infographic on the data, visit CommBank’s consumer trends website, Signals (commbank.com.au/signals), which identifies trends based on CommBank transactional data across a significant sample size of Australian debit and credit card holders.

References:

1. CommBank credit and debit system transactional data tax year 2012/13. Figure based on consumers spending the average amount on all motoring categories. This figure includes registration and CTP insurance costs outlined in the RACQ ‘Vehicle Running Costs 2013‘ survey conducted at 24th April 2013, http://www.racq.com.au/__data/assets/pdf_file/0004/42475/Motor-Vehicle-Registration-Fees-in-Queensland_RACQ-Fact-Sheet.pdf

4. 2013, RACQ ‘Vehicle Running Costs 2013‘, survey conducted at 24th April 2013, http://www.racq.com.au/__data/assets/pdf_file/0004/42475/Motor-Vehicle-Registration-Fees-in-Queensland_RACQ-Fact-Sheet.pdf. Note: As each jurisdiction uses a different method to charge fees, a number of assumptions are made, as detailed in the notes to the chart, to ensure that the figures are a fair comparison. The figures do not include CTP insurance, as the insurance charge goes to the nominated CTP provider rather than to government revenue.

5. Trimmed average with outliers removed

6. Signals data: all credit and debit system transactions through credit and debit systems for tax year 2012/2013

7. 2013, RACQ ‘Vehicle Running Costs 2013‘, survey conducted at 24th April 2013, http://www.racq.com.au/__data/assets/pdf_file/0004/42475/Motor-Vehicle-Registration-Fees-in-Queensland_RACQ-Fact-Sheet.pdf. Note: As each jurisdiction uses a different method to charge fees, a number of assumptions are made, as detailed in the notes on the website, to ensure that the figures are a fair comparison. This analysis includes all Compulsory Third Party insurance premiums, including scheme levies, administration fees and GST. All costs are the annual full prices for private use, not including concessions available to some car owners. Costs are Australian CTP Fees in May 2012 and have been calculated from average of low-risk, medium-risk and high-risk zones.

8. 2013, RACQ ‘Vehicle Running Costs 2013‘, survey conducted at 24th April 2013, http://www.racq.com.au/__data/assets/pdf_file/0004/42475/Motor-Vehicle-Registration-Fees-in-Queensland_RACQ-Fact-Sheet.pdf. Note: As each jurisdiction uses a different method to charge fees, a number of assumptions are made, as detailed in the notes on the website, to ensure that the figures are a fair comparison. The figures show Annual Vehicle Registration Fees by State / Territory as at May 2012 (Excluding CTP) and have been calculated using the average of small, medium and large size cars.

9. Visits paid by debit or credit card only.

10. 2013, RACQ ‘Vehicle Running Costs 2013‘, survey conducted at 24th April 2013, http://www.racq.com.au/motoring/cars/car_economy/vehicle_running_costs_2013. The analysis includes the average standing (depreciation and interest on loan repayments) and running (fuel, tyres, service repairs) costs, comparing the average total annual costs of small and large cars.

Additional Assets:

The following additional assets are available as part of the research:

About CommBank Signals website:
CommBank Signals is a content platform housing information on CommBank transactional data, looking at consumer buying patterns and trends to assist consumers in making better and more informed financial decisions. All trends are based on aggregated spend data and no individually identifiable information is made available to the public. For more information, visit www.commbank.com.au/signals

About Diana Mousina, CommBank Economist:
Diana joined CommBank in 2011. As an Economist her responsibilities include monitoring, analysing and forecasting trends in the Australian economy and sharing these insights. Diana holds a Bachelor of Commerce/Economics from the University of New South Wales.

How the research was calculated:
CommBank Signals (www.commbank.com.au/Signals) data is calculated through the collection and analysis of CommBank transactional data over the past 4 years (2009 – 2012) combined with CommBank research findings. The data is scrutinised by a CommBank senior analyst, researcher and economist to ensure accuracy.